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When is voluntary mediation obligatory?


Until the UK leaves the EU at some point in the next two years (or possibly longer) we are still bound by judgments from the Court of Justice of the European Union.

So it is interesting to note that the Court has recently concluded in an Italian case that the obligation which Italy imposes on parties in disputes to attend mediation is lawful.

Italy is one of the forward thinking EU states which requires a significant proportion of disputes to attend mediation before going to court. This case revolved around two consumers who were appealing from a judgment which forced them to try mediation before going to appeal over a lower court's ruling.

Italy sought a preliminary opinion from the European Court on whether the obligation contradicted the need for mediation/adr to be voluntary.

Had the decision been against the Italian court’s decision it would have potentially impacted on the obligations placed on family disputes and the tacit obligation in commercial disputes in the UK.

The Court has said that provided Italy’s national legislation which imposes mandatory mediation as a pre-condition to litigation does not prevent access to the judicial system is it not in breach of the EU’s Alternative Dispute resolution framework Directive 2008/52.

There are certain limits on the requirement in respect of the obligation to have the assistance of lawyers and the penalties for not proceeding with the mediation for no reason.

In Menini and another v Banco Popolare Società Cooperativa (Case C-75/16) the Court said that the voluntary nature of mediation lies in the fact that "the parties are themselves in charge of the process and may organise it as they wish and terminate it at any time".

So it’s not whether the system is an obligatory one but that the parties have a right to access the judicial system when it is unsuccessful.

While the Court accepted the Italian law had put another hoop through which parties had to jump to get access to the judicial process it said that it was acknowledged EU law that "fundamental rights do not constitute unfettered prerogatives and may be restricted", provided that the restrictions do not cause "a disproportionate and intolerable interference" with the rights in question.

The Court set out guidelines to ensure that the process did not cause a disproportionate and intolerable interference, the process should:

  • not result in a decision that is binding on the parties (unless the parties bind themselves);

  • not cause a substantial delay in the ability to commence legal proceedings (and suspends any limitation period);

  • not give rise to costs – or gives rise to very low costs – for the parties;

  • be accessed by means other than purely electronic means

  • not prevent interim measures being sought from a court in cases of urgency.

  • Not require the parties to be legally assisted in the mediation;

  • Not penalise the parties for withdrawing from the mediation without valid grounds (unless the concept of "valid grounds" includes the party simply being dissatisfied with the ADR procedure).

The case has been sent back to the Italian court to determine if the criteria are met.

In the UK and therefore in any mediation here at Northwest Mediation there is only a binding agreement when the parties have reached a decision, we carry out most two party mediations within a day and our costs are considerably less than proceeding to any court hearing, we are accessible online, by phone and (our preferred method of mediation) in person, you do not need to be legally represented (but you can be) and because the process is voluntary you can withdraw at any time.

However, the court in its ruling said it envisaged a process where one party could be penalised if they disengaged before the first meeting.

Will the British courts face a challenge for the penalties costs imposed on parties failing to engage in the process? The final point won't directly conflict with the Court of Appeal's decision in Thakkar -v- Patel [2017] EWCA Civ 117 where the penalty was imposed on the party who did not engage at all.

However, further interpretation will be needed on how far along the route of mediation anyone must go before they can remove themselves from the process without penalty.

If you need to resolve a personal or commercial dispute call Ed Johnson at Northwest Mediation on 0793138347 or via email at ed.johnson@northwestmediation.co.uk


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CONTACT US

 ​​Northwest Mediation

Adelphi Mill

Suite 1.1 (F)

Bollington

SK10 5JB

info@northwestmediation.co.uk

07931318347

 

Northwest Mediation, Stockport Mediation and Bramhall Mediation are trading names of Ed Johnson

(c) Ed Johnson 2016

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